In 2014 David Chernow was appointed CEO of Select Medical Holdings Corporation (NYSE:SEM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Chernow's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Select Medical Holdings Corporation has a market cap of US$2.8b, and reported total annual CEO compensation of US$8.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$995k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
Thus we can conclude that David Chernow receives more in total compensation than the median of a group of companies in the same market, and of similar size to Select Medical Holdings Corporation. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Select Medical Holdings has changed over time.
Is Select Medical Holdings Corporation Growing?
Select Medical Holdings Corporation has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). Its revenue is up 8.8% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Select Medical Holdings Corporation Been A Good Investment?
Most shareholders would probably be pleased with Select Medical Holdings Corporation for providing a total return of 66% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by Select Medical Holdings Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Select Medical Holdings insiders are buying or selling shares.
If you want to buy a stock that is better than Select Medical Holdings, this free list of high return, low debt companies is a great place to look.
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